UPMC plans to raise starting hourly wages to $15 by 2021, but what does that mean for unionization efforts?

Two years ago, UPMC executive Gregory Peaslee told The New York Times that employees at UPMC facilities would never see a minimum-wage increase to $15 an hour. He reasoned that raising the minimum wage that high would cost UPMC $600 million annually and “wipe out its operating margin of 1 percent to 2 percent.”

“There is a fundamental difference of opinion between us,” said Peaslee, UPMC’s senior vice president for human resources in 2014. “Should every job in America individually support a family of four? I think that’s a great notion, but it’s not realistic.”

But last week, UPMC reversed course when the health-care provider announced it would be raising the minimum starting wage at most of its facilities to $15 an hour by 2021.

“We are very proud of our wages, generous benefits and other rewards, and of the tens of thousands of jobs at UPMC that have meaning and purpose, and that fulfill an incredibly important mission for the region and the communities that we serve,” John Galley, UPMC’s senior vice president and chief human-resources officer, said in a statement last week. “We review the market each year to ensure that our salary ranges are competitive and we are committed to rewarding our strong-performing employees with merit increases on an annual basis.”

It’s a long-awaited victory in a local and national labor movement that has made UPMC one of its main targets. For the past five years, employees at UPMC facilities have been organizing to unionize service workers at the health-care giant’s hospitals in an effort to raise wages and improve benefits.

“These workers, by building a robust movement of hospital workers and community residents, have made UPMC the largest private employer in the country to raise wages to $15,” says Neal Bisno, president of Service Employees International Union Healthcare Pennsylvania. “Because UPMC is the largest private employer in the whole state of Pennsylvania, by lifting up workers there, it will have the impact of lifting up the wages of low-wage workers all over the state whose pay has really been held down by UPMC’s failure to pay a living wage.”

But last week’s announcement feels somewhat removed from those efforts. Union organizers seemed surprised by UPMC’s decision when it was announced on March 29. UPMC’s statements about its decision don’t even acknowledge the local movement to increase wages and benefits. And one week later, even though union supporters say UPMC’s decision is the product of their efforts, they’re already focused on moving forward with a national day of action later this month.

So what impact will UPMC’s announcement have on the local labor movement? Will workers at Pennsylvania’s largest private employer ever vote to unionize? And how does this announcement tie into negotiations between UPMC and Mayor Bill Peduto’s office over its nonprofit status, and the possibility of payments in lieu of property taxes? UPMC did not respond to multiple requests for comment for this story, but others did.

Sixty-year-old Jeannie Williams has worked as a technician tasked with sterilizing surgical instruments at UPMC for the past 15 years. Annual raises have lifted her hourly wage to $14.50 from her pay of $6.50 when she started at UPMC in 2001. Unfortunately, UPMC’s recent announcement will have next to no impact on her earnings.

“I feel they should’ve done it a long time ago,” says Williams. “Fifteen’s great, but in reality they’re only raising the base rate, which really isn’t going to affect me. It’s still really great that they’re doing it finally, but more important is us getting a union.”

That’s because Williams — an outspoken advocate of unionization — says she and her co-workers don’t have a voice in their workplace. She says complaints made to the human-resources department, ranging from poor working conditions to understaffing, go unanswered.

“If you call HR to report something, HR probably 99 percent of the time is on [UPMC’s] side,” says Williams. “So it’s like fighting an uphill battle, and you have nobody to speak up for you. We need a voice, and the only way to get that and fair treatment is a union.”

And Williams says UPMC’s electronic “Your Voice” system, which is meant to serve as an outlet for employee feedback, is equally ineffective.

“That’s a total joke,” Williams says. “They’re trying to get people to think if they let us give our opinion, we’ll go away and we won’t keep fighting for the union. Well, they’re totally wrong. I’ve given my opinion a lot of times, and nothing has come of it. It just goes in one ear and out the other.”

Williams says most of her co-workers are in favor of a union because they feel their needs are being ignored. Many have asked her when workers will be voting to unionize, but she says that can’t happen until UPMC stops intimidating workers.

“Nobody’s ever said they’re not in favor of it to me,” says Williams. “They all want to know when we can vote. I try to tell them, you can’t just vote. UPMC won’t quit intimidating us. They won’t even let us talk about it, let alone let us have a vote.”

UPMC has gotten in trouble in the past for what union organizers call intimidation tactics. After complaints were filed with the National Labor Relations Board, UPMC removed computer screensavers with the message “You can say NO to the S.E.I.U., it’s your right.” But employees say the screensavers have since re-emerged.

“A federal labor-board judge, after months and months of hearings, declared that UPMC’s systematic violation of workers’ rights was so egregious that it evidenced a lack of respect for the fundamental statutory rights of employees,” says SEIU’s Bisno. “So the real next step is we’re going to keep the pressure on until UPMC changes its business practices by respecting its workers’ rights to start a union.”

Part of that effort will be a national day of action on April 14, when hospital workers, home-care workers, child-care workers, fast-food workers, ministers, labor leaders, elected officials, students and environmentalists will come together in Oakland. According to organizers, participants will be continuing calls to UPMC to allow workers to form a union without intimidation, to increase staffing levels and to provide access to affordable healthcare for workers.

And Williams says she doesn’t think it will be long before these kinds of demonstrations lead to success for those fighting to unionize their workplaces.

“I think it’s going to happen quickly. UPMC isn’t going to have a leg to stand on. Something’s got to break. The city’s tired of their antics — saying they’re a nonprofit. They’re not a nonprofit,” says Williams. “They said this $15 an hour would never happen. Well, it happened; never say never. We’re going to fight until we get it.”

City government has been playing a major role in the local movement, both on the frontlines and behind the scenes. Last November, Peduto signed an executive order raising the minimum wage for city employees to $15 per hour, to be phased in over the next five years.

“The mayor has been one of the leaders in the drive for $15,” says Tim McNulty, spokesperson for the mayor’s office. “Certainly the mayor was happy when UPMC raised their wages.”

But another factor in the fight against UPMC has been kept relatively quiet. UPMC receives an estimated $20 million in tax breaks annually because of its status as a nonprofit. But critics argue that with annual revenues surpassing $10 billion, the health-care giant is anything but a nonprofit. UPMC CEO Jeffrey Romoff earns a salary of more than $6 million. UPMC leases a corporate jet. And the organization also runs for-profit facilities in Italy, Ireland and Kazakhstan.

These and other factors have led the mayor’s office to examine the nonprofit status of UPMC and other local institutions. In 2013, former Mayor Luke Ravenstahl filed a lawsuit challenging UPMC’s nonprofit status. Peduto dropped the lawsuit last year as a sign of good faith in negotiations. Talks between the mayor’s office and UPMC have been ongoing, and the mayor’s office has been looking into a system of payments in lieu of taxes. The city has had these types of agreements with other organizations in the past, but the last one expired in 2013.

“Social equity has been a part of the talks with all four of the [city’s largest] nonprofits — Highmark, Carnegie Mellon, Pitt [and UPMC] — about some kind of payment-in-lieu-of-taxes plan, which has been changing and part of negotiations for a couple years now,” says McNulty. “The talks have been about things like, perhaps all four of the nonprofits could put some money in, and we could create something sort of like a RAD board that would issue payments to different things, like maybe housing or infrastructure improvements. We’re sort of looking at a new model of payments in lieu of taxes.”

McNulty said there was no timetable for when those negotiations would conclude, but organizers say the conversations being held about UPMC’s nonprofit status are integral to their struggle.

“Workers in this community are saying to UPMC, ‘We need you to act like a real charity,’” says Bisno of SEIU. “You’re the beneficiary of hundreds of millions of dollars of tax exemptions — taxpayer subsidies to your institution every year. So what we expect is you to act like a good corporate citizen. That means, pay your fair share for public services, pay a living wage and respect workers rights.”